>Why would nationalizing the weak cause the meltdown of the not-so-weak?
Why is BAC one of the weakest banks? They saved MER and (possibly) the US financial system for the time being. I know some of the brighter board luminaries assured us at the time of LTCM that no forebearance was offered, but you may notice that Bear Stearns is no longer in operation...
The shadow bank system (securitization, etc) is closed for now, so how much sense does it make for the Gov to get rid of one of the few balance sheets out there that could absorb a significant number of loans once it NIMs itself up a bit? (I'm operating on the assumption that a nationalized BAC would be a run-off affair, not a growth proposition)